Trade Deficit Trickery

By

Frank Newman and

Dan Newman

Updated March 14, 2005 12:01 a.m. ET

Foreign investors will leave us starved for cash, and foreign bill collectors will one day impoverish our children, say fearful analysts. To avert disaster, they insist on immediate "remedies": cutting our budget deficit, increasing saving, and encouraging the decline of the dollar. But none of these tricks really work, or need to.

Many economic commentators argue that the trade deficit somehow results from low saving and the federal budget deficit. But reducing the budget deficit can't really help the trade...